Gateway opens floodgates

Gateway 2000, the company that claims fame as the biggest direct marketer of PCs in the United States, offers one of its products at select retail stores.

20 August 19969:00 pm BST

Gateway 2000, the company that claims fame as the biggest direct marketer of PCs in the United States, will begin offering one of its newest products at select retail stores.

The company will be selling its Destination big-screen PC through Nobody Beats the Wiz stores on the East Coast and select CompUSA superstores throughout the U.S.; the system is currently available directly from Gateway 2000.

The Destination PC combines a 31-inch VGA monitor with a Pentium processor ranging from 120 MHz to 200 MHz, a wireless keyboard and mouse, an optional stereo system, and the ability to connect with VCRs and other video devices in an attempt to place the computer on par with families' TVs as a focus of activity.

The decision to market through two retailers with a strong brand name, analysts say, is the only way to make the Destination a profitable product. Gateway will be competing with home electronics companies with high name-recognition such as Sony and Zenith, which have promised in recent months to enter the PC-TV business.

To further market the convergence between PC and TV, Gateway 2000 will also feature the system in public locations such as Epcot Center in Disney World and a video arcade near Seattle, Washington.

Other companies are pushing somewhat different takes on the PC-TV. Intel is pushing its Intercast card as a way for users to surf the Internet while watching a related broadcast on a monitor.

Steve Baker, a senior analyst at IDC, a market research firm, said Gateway was making "a wise move, but not one that was unexpected. Gateway recognized that a product like that is such a difficult sell. It's such an audio and visual experience, that customers need to see it. The only way to do that effectively is through [established] retail channels."

No sales figures on the Destination are available, but sales are likely to be slow, as the starting price is around $4,000. Still, Baker estimates that 30 percent of sales have been to corporations and educational institutions that need the units for presentations, a number which has surprised Gateway.

"The market is limited right now [because of the price], but as technology advances, the prices come down and more people get out there. I don't know if this will ever be more than a specialty market, but there's no reason it can't be a profitable one," Baker said.